TELENOR PAKISTAN

S.M.ABBAS ZAIDI,
(feedback@pgeconomist.com)
Research Analyst
, PAGE
Aug 9 - 15, 2010

Telenor Pakistan launched its operations in March 2005 as the single largest direct European investment in Pakistan setting precedence for further foreign investments in the telecom sector.

TELENOR SUBSCRIBERS (IN MN)

YEARS SUBSCRIBERS
H1O5 0.8
H2O5 1.9
H1O6 3.2
H2O6 6.7
H1O7 10.7
H2O7 14.6
H1O8 18
H109 21.29
H210 23.65

Telenor has crossed many milestones and grown in a number of directions making Telenor Pakistan a leading telecom operator of the country.

Telenor is the fastest growing mobile network in the country with coverage reaching deep into many of the remotest areas of Pakistan. The company is keeping ahead by investing heavily in infrastructure expansion. With two billion dollar already invested, the company has extended agreements with their vendors for network expansion and services until 2009.

The company spreads across Pakistan creating 2,500 direct and 25,000-plus indirect employment opportunities. Telenor has a network of 23 company-owned sales and service centers more than 200 franchisees and some 100,000 retail outlets.

At the end of May 2010, it had a reported subscriber base of 23.65 million and a market share of 24 per cent making it the country's second largest mobile operator.

CONTRIBUTION TO PAK ECONOMY

The company continues to contribute to Pakistan's economy. It has created 2,500 direct and 25,000 plus indirect jobs and has a network of 24 sales and service centers, more than 250 franchises, and some 150,000 retailers, thus providing a means to livelihood to thousands.

For 2009, it is estimated that Telenor Pakistan contributed Rs20 billion in various forms of direct and indirect taxes to the economy of Pakistan.

LARGEST DATA NETWORK OF PAKISTAN

Telenor gives its customers the access to internet from mobile phone or personal computer with Telenor's largest GPRS service at over numerous destinations across Pakistan where ever there is Telenor coverage. Telenor acquired the license for providing GSM 900/1800 services in Pakistan in April 2004 and has launched its services commercially in all major cities. Telenor Pakistan as the market innovation leader deployed a network compatible to smooth upgrade to EDGE. As at 30 September 2009, Telenor Pakistan's EDGE coverage was the most extensive in Pakistan.

TELENOR PAKISTAN

OPERATORS OCT - DEC 07 JAN - MAR 08 APR - JUN 08 JUL - SEP 08 OCT - DEC 08
Rev by Cellular Operators (Rs in mn) 10,877 12,099 12,848 11,919 13,010
Inv Cellular Mobile Operators $ mn 251 108.3 91 83.8 233.9
Cell Sites by Cellular Operators 4,479 4,756 5,017 5,584 5,998
Source: PTA, Inv: Investment, Rev: Revenues

MARKET SHARES

Pakistan's mobile market has been expanding exceptionally fast and today more than 90 per cent of the country's total population is covered by one or the other mobile operator. All mobile operators are trying to increase their service area to every possible village and town. Currently, Mobilink is the market leader with having 32 per cent total subscribers in the market followed by Telenor share of which stood at 23.8 per cent in Feb 10. Ufone has lost its share for almost a year now to 19 per cent.

CELLULAR MARKET SHARE (%)

COMPANIES FEB 10 JUN 09
Telenor 23.80 22.15
Warid 16.90 18.96
Mobilink 32.50 30.89
Instaphone 0.00 0.04
Zong 7.20 6.77
Ufone 21.20 19.50

However, Telenor has been growing through its subscriber's base. Zong has been penetrating the local market quite aggressively with its share jumping from mere 2 per cent to 7 per cent in 2010. This jump is mainly attributed to their aggressive marking and attractive packages mainly targeting the youth in the country. Warid saw drop in its share in the market.

FDI IN TELECOM SECTOR

Telecom sector has failed to attract handsome inflow of foreign direct investment (FDI) in the last fiscal year despite the announcement of multiple new projects and expansion of business.

Telecom sector has recorded steep decline of 72 per cent in investments in the first eight months of FY10 as majority of the foreign-based companies avoided capital investment despite recovery in financial status from the global credit crunch.

The FDI in telecom sector has declined to $205.4 million in Jul-Feb as compared to the landed investment recorded at $736.9 million in the same period of last financial year.

In the last eight years, the FDI in telecom sector witnessed tremendous growth with the rapid expansion of telephony services and business in the country. The sector has attracted $6.768 billion in this period which was the biggest amount comparing with the contribution of other sectors in FDI.

Telenor Pakistan has expanded its network coverage which made it the 2nd largest network in the shortest period. In addition, the Telenor should increase market share and focus on innovative business in this competitive environment.